Maersk: $373 million first quarter loss
Citing deteriorating “general market conditions,” A.P. Moller – Maersk Tuesday reported a first quarter loss of $373 million compared to a profit of $1.05 billion in the same 2008 period.
The company noted uncertainty about the outlook for the global economy, freight rates and volumes, oil prices and the U.S. dollar exchange rate for the remainder of the year.
It cautioned, “The result for 2009 is expected to be significantly below 2008 and might be negative.”
The Danish conglomerate said its container shipping company Maersk Line carried 14 percent less cargo and that freight rates were 24 percent lower in the first quarter when compared to the same 2008 period.
The company’s other main business is oil and gas production. Maersk noted the average oil price in the first quarter was 54 percent below average oil price in the same period in 2008. It produced 18 percent more oil and gas in the first quarter of than in the corresponding 2008 period.
'The result is impacted by the extraordinary global recession, which affects all our markets negatively,” said Nils S. Andersen, chief executive officer. “Our priorities for the group remain unchanged. We will continue our efforts to strengthen Maersk Line's competitiveness, building the strength of our people and organization, reducing costs and improving our environmental record, which will strengthen the group both in the short and in the long-term.'
“Compared to the first quarter the crude oil prices for the remainder of the year are assumed to be slightly higher, just as the diminishing decline in freight volumes in the container trades is expected to reduce the decline in the container freight rates,' the company said. 'These conditions combined with an increased effect from cost savings are expected to improve the group's earnings in the second half of 2009. A continued loss is expected for the second quarter and it cannot be ruled out that the total result for 2009 could be negative.”